Customer Loyalty Program in Retail Marketing. MBA Marketing study material.

Offering extra rewards or membership invitation to the customers is nothing but the customer loyalty program conducted by the retailers. The aim of customer loyalty program in retail marketing is to influence the loyal customers to keep coming back to store for more and to increase the footfall of newbies to the store ultimately increase the sales. What exactly it means and how can it help to retail marketing? Let’s have a look in brief:

What is a Customer Loyalty Program??

It is a planned strategic program which aims to retain the customers by giving rewards, benefits or additional privilege in every purchase to them for their loyalty and regularity towards the brand.

It is the most powerful customer retention tool because delighting to loyal customers is very important only through which the mouth publicity can take place.

Also, offering rewards, bonus or any benefits to the customers will lead to encouraging them to spend more to get more through which retailers can reach a sales goal.

A successful customer loyalty program is eventually an overall success of retail marketing.

Ways to Build Customer Loyalty

There are numerous forms of rewarding the existing customers and evaluation is going on and on. But some of the popular ways are explained below:

·        Points:

Point redemption or point privilege in the retail store is very popular customer loyalty program. Customers can earn the points according to the retailer’s policy in their every frequent purchase. These points will be converted into the money or discounts or coupons etc. when customers are going to use it while next purchase. However, a points system is the only concern with to earn and spend in the same store or with the same brand and cannot use it with the other as it doesn’t include cash back policy. The main form of work of this program is to motivate the customers to come back, again and again, to spend more and more in the same store.

·        Tiered System:

A tiered system of customer loyalty program is basically a process of analyzing customer purchase behavior, recording their purchasing milestone and grouping them accordingly,   considering the frequency of purchase and how much money they spent, and offering them the rewards, prize or discounts by bearing in mind the purchasing milestones. Usually, the big scale industries are commonly using the tier system such as airlines, hospitality or insurance and banking etc.

·        Upfront Fees:

The Dictionary meaning of upfront fee is the payment before purchasing in advance. But how it can be a loyalty program for retailers? Yes, it is possible through analyzing the reasons of low footfall and customized it with charge some amount or fee to customers to detour the common purchasing obstacles. This loyalty program is beneficial for both the retailers and the customers. Amazon Prime is the best example of upfront fees loyalty program which offers you a free shipping by paying some bucks.

·        Discounts, Rebates, Cash Back:

After points system, discounts, rebates, and cash backs loyalty programs are commonly used by retailers to engage the customers and influence them to spend more. Discount or cash back is an immediate monetary benefit which can be applied for a certain period of time on any purchase. Rebate is a refund benefit for the customers who already paid for their purchase. Rebate is not an instant money benefit.  

·        Free Gifts, Free Service:

Distributing gifts and providing free services are the part of paid customer loyalty programs adopted by the retailers to maintain long-term customer relationship and build a customer loyalty. This kind of customer service can be expensive for the retailers but it may increase the footfall in store. 

·        Become a Partner:

Customer retention and customer engagement may force the retailer to make a strategic partnership with other. This strategic partnership can be effective for growing the sales, business and customer loyalty as well. To get the full benefit of this program, retailers have to check the suitable partner who is selling substitute products eventually helpful for the customers.

Customer loyalty program may vary from business to business depends on the size of it and product or service to be sell. But this is the most core area of marketing environment and without this retailers cannot sustain in such a widely spread competitive marketplace. 

Customer Service in Retail Marketing? MBA Marketing study material.

When you enter the store or a shop what are the factors that make you feel more comfortable while shopping? These factors are derived from the customer service in retail marketing. Customers always want to hear the conventional compassion while solving their problems in purchasing however, it may come to exchange products without difficulties, free repairing or sometimes giving more to senior citizens. It is beyond the communication between customers and retailers. This post focuses on how effectively retailers can provide the service to the customer?

What is Customer Service?

It is a set of services giving to the customers to assist them while purchasing, responding their questions, facilitating them to solve the problems, giving attention to every customer. To create this winning situation, retailers need to build the customer-friendly policies to make them feel they are important for retailers which surely leads to maintain long-term customer loyalty.  

What are the effective skills to provide a Customer Service?

Retailers need to make a strategic plan to provide the satisfactory and influential customer service. Below some skills or tactics which may helpful for the retailer to do so.

·        Gentle greeting at first sight:

Giving a gentle smile and greetings to the customers on their very first visit is a basic role of customer service provider or retailer. It makes a positive impact on the atmosphere for customer towards purchasing. Personal appearance should be formal and well-presented in-front of the customers. In every conversation with the customers, voice should be very kind and not too loud and words should be very clear so that everyone can understand quickly.

·        Paying attention is paramount:

Everyone wants the attention in this world. How do you feel when you enter in store and no one notice you? Do u feel outraged? Of course yes, therefore when it comes to the customer service, every customer has a right to receive a full attention from retailer and it is utmost duty of customer service provider to pay attention to customer. Customer service provider should not let the customer to wander everywhere and getting confused. Paying attention is advantageous to build customer loyalty positive attitude towards brand.

·        Personal interaction:

It is another vital duty of customer service provider after paying attention to pleasantly interact with the customer. The first interaction should be asking about how can help to them. In this stage you can get the knowledge of what customers want and the solution of this question is core aim of retailers. This interaction also involve the information about brands, product offerings, promotions etc.

·        Explain within frame:

When the customer need a solution to their need satisfaction, quickly solve their problem by offering what they want. With this, retailers may explain the products features and use. But sometimes, customer may know everything about the products and brands and need not to be over knowledgeable, in this case retailers ensure their need has satisfied and explaining with out of frame may harmful for a brand. Customers never want to come again to a store because of the overpitching of the products.

·        Be positive over negative:

This is a core responsibility of the customer service provider to clear all the doubts of the customers regarding the use of products, quality of products or even with the brand. If the customer has taking a negative impression of the product or a brand, retailers need to correct it by providing a positive and wise information without proving customers wrong, otherwise the customers feel outraged and never come back to the store.

·        Stopover outreaching:

Some customers just want to surf, checking out the products and offering and don’t have a plan to purchase. In this case, what happen if customer service provider is rushed hovering there? It make customers feel embarrass even to enter the store. So stop outreaching with the customers, let them surf first. Don’t force your services over them. Try to know how much service customers want. Pressurising to the customers may dangerous for sales.

·        Ensure bagging:

On a billing counter, retailers need to ensure the product is not defective or incorrect size before packing it, if not, change it with new one from the stock. Also, retailers need to check out the amount on bill and product should be same before getting paid. Retailer make sure the customers receive everything they paid for before leaving the store.

·        Goodbye with assuring another visit:

Sending off with the smile will be an advantage for the retailers which create a positive vibe for the customers. Saying goodbye with greetings for the day may build a longer journey of a customer with the brand or store. Retailers also ensure to encourage the customers to come and visit again to the store while sending off.

These skills or techniques of customer service in retail marketing will definitely lead to reach the goal of the store.

Customer Relationship Management in Retail Marketing. MBA Marketing study material.

Maintain and upturn the long-term relationship with the customers is a vital course for the retailers to increase the footfall of the store which eventually converts into the sales. But to make this win-win situation, how the customer relationship management in retail marketing can help the retailers? Let’s have a look further:

Customer Relationship Management (CRM) in Retail Marketing:

It is set of business strategies and system or software which focuses on customer satisfaction and building loyalty with a retailers’ most valued customers. A process or a system which constantly engage the customers by delightful offerings of retailers is called as a customer relationship management in the retail marketing environment.

It aims to convert the end users into the loyal customers at first visit to the retail store by satisfying their needs with attending their attitudes and feelings at very first purchase.

Components of Customer Relationship Management (CRM):

·         Customer Service:

Identifying, collecting and analyzing the customers’ needs and wants is the main goal of customer service support applications. Also, it is very important to analyze the customers’ complaints and suggestions to cater the business in high level. In the modern era, retailers are using various customer database software to integrate the information about every customers’ purchasing pattern their needs and behavior. Customer service is a part of front desk service which directly communicates with the customers promote the products and services and receives the information to maintain a customer database.

·         Sales Force Automation:

Salesforce automation is a very useful tool for customer relationship management. It is primarily designed for sales personals to manage their each and every customer’s records.  It includes the functionality to maintain the sales cycle such as lead generation, lead distribution, follow-ups, tracking records, design work calendar for the sales team, analysis of sales data etc. This tool also helps to forecast the sales which lead to expanding the future opportunities for the retailers. It is beneficial for managing the help-desk or customer care services such as call centers to quickly solve the customers’ problems and complaints.  

·         Market Research:

Market research involves the process of campaigning management which provides support for a marketing budget, promotional campaigns, ad placements, target market, recording customers’ response and analyze the performance of these campaigns. Market research for customer relationship management also helps to provide marketing analysis tools which give the accurate statistical and systematic data analysis.

·         Data Mining and Analytics:

Data mining is a useful process of collection, sorting, analyzing, organizing the data and use this data for identifying future demographic cross-selling opportunities and chance to improve the pattern and modify the process to maintain customer loyalty.

Analytics is an immense study of available data and represent it in a specific logical form to spot the trend or condition of the market. It shows a graphical presentation such as chart, histogram, figures, diagrams etc. of the market situation through analyzing the data. It helps to calculate the progress in customer relationship management accurately.

All of above components of customer relationship management is important to improve the work around the customer satisfaction and loyalty as well as finding the different opportunities to maintain a long-term relationship with customers.